If a business gives positive-rated goods away to a value exceeding the de minimis limit, output tax is due.

This anti avoidance provision stops a person saving VAT by buying something via his business and then giving it away to a friend. Thus, if goods forming part of the assets of a business are transferred or disposed of by, or under the directions of, the trader, so that they no longer form part of the business assets, there is a supply of goods whether or not the transfer or disposition has been made for a consideration (VATA 1994, Sch. 4, para. 5(1)).

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